Welcome back, everybody. As you know we have been in the gilded age for some time now. Weve already seen the Technological Innovations that made this economic expansion possible. We saw the economic transformations and the effect of those changes on the economy as far as lifestyles both for the very ritzy opulent robber baron lifestyles and also the very poor. Whether it was the People Living in the shacks of the new england mill towns or whether it was the increasing problems of housing in the sanitation that came with this rapid and in many ways chaotic growth of the cities in the late 19th century. All of it accompanied by problems going along with immigration. We saw in particular there was some frustration with this new gilded age regime. As we talked about the farmers in this. That could have been called discontent in the gilded age part one. Today we turn our attention mostly back towards industry and in some ways back toward the city as well. I want to look at different types of frustrations with this new order in america. We started with the song eight hours which was a popular labor anthem in the 1880s. Youre the chorus eight hours for work eight hours for rest eight hours for what we well. In some ways that song speaks what we will be talking about today. Eight hours for work and eight hours for rest. We are talking about labor relations. Were talking about more broadly speaking clinical economy. We are talking about the potential for state regulations and these arguments over that. That is somewhat straightforward. What about eight hours for what we will. They say we want to feel the sunshine. We are not machines, were human beings. We want to have a life outside of work. Even those on the top of this new gilded age are also in many ways growing anxious over this new world that is coming about. We look at economics. As with so much else, a lot of our story starts with the railroads. You have seen how much the Transcontinental Railroad changed the west. It didnt stop in 1869 when they drove the golden spike. They continue to build by the end of the century. There were four Transcontinental Railroads by the end of the century. There were all kinds of tributary lines to connect to different parts of the west to those main corridors. It seemed like a really good investment. The lions share of the stocks on the New York Stock Exchange were not industrial stocks, they were Railroad Stocks. A lot of people scramble to get in on the ground floor. One of those projects was the Northern Pacific railroad. The fellow who won the right to be the chief fundraiser for that project was jacob. A very well respected financier. Hed been a major financier of the union effort during the civil war. Problem was this. Investors were starting to realize in the 1870s that perhaps in our zeal for Railroad Building we had gone too far. Maybe we are overbuilt. Maybe the Railroad Bubble is about to first. All of a sudden jay cooke had trouble raising money. He had trouble getting a loan. People found that he was overextended. On september 18, 1873 he and his company declared bankruptcy. When cook went under a drag down under businesses and banks with him. A panic hit wall street. Beginning september 20 the New York Stock Exchange which was heavily populated by Railroad Stocks closed for 10 days and over the next two months 55 railroads went bankrupt. It didnt stop there. By 1874 25 of the nations railroads bonds were in default. It wasnt just railroads that were affected. Over the following two years they were over 18,000 businesses that failed. Many people including this cartoonist clung to the traditional view that ultimately this was a necessary evil. Failure is part of the capitalist system and so we should see the panic as the cartoonist does as a sanitation officer cleaning all of the trash out of wall street. Maybe so but in the meantime a lot of people have to suffer. In the meantime Railroad Construction ground to a halt. Unemployment skyrocketed in many sectors and in some cities unemployment was as high as 25 . Joblessness remained rife for the next five years. At the same moment. People were starting to ask questions about whether or not the railroads should have so much power. Within this new national economy. We saw the farmers asking these questions very loudly. Here we see Railroad TycoonWilliam Henry vanderbilt pictured as the modern colossus of railroads. Along with some of his colleagues cyrus field in the notorious jay gould. Farmers considered their great control over the economy to be extortion. Other groups were starting to feel this way as well. The political efforts of frustrated farmers and some allied industrialists led to early attempts at state intervention. In the early 1870s some states passed what we call the granger laws. They set maximum freight elevator rates. For bidding rate discrimination against shortfalls. Any urban consumers felt that the railroads were overcharging them. It was not just farmers who were frustrated. They created state railroad commissions to supervise and enforce this new Regulatory Regime. This happened in places like mile minnesota and iowa and illinois. It was there that the law was challenged by the firm of monday and scott. Who were confused accused of having overcharged customers of the Grain Elevator in chicago. They challenge to the 100 fine and it went to the Supreme Court and 1877 by a seventwo majority the court under chief Justice Waite said that when private property was devoted to a public use is subject to public regulation. The doors open for the states to step in. Dont consider this a longterm win for state regulation. In 1886 a 63 majority at the Supreme Court declared that under the Commerce Clause of the constitution states were forbidden to impose direct burdens on interstate commerce. Illinois Regulatory Regime was considered a direct burden on a railroad which was considered interstate commerce and therefore statelevel regulation was severely hampered moving forward after the wabash case. This along with a couple of other cases in the late 1880s extended the 14th amendment protections to corporations. It acted to undermine the state regulation. That doesnt mean the public stopped being frustrated with the abuses of the railroads. Public outrage over the wabash case led to the passage of the interstate commerce act by congress in 1887. It created the interstate Commerce Commission and it made its forbidden to have special rates for powerful shippers. You remember rockefellers scheme from a few weeks ago. There would be no rate discrimination against shortfalls. Public inspection of rates. If you abuse the regulations, you could face up to a 5,000 fine. Take that, vanderbilt. They werent through. In 1890 growing public frustration over the strength of the trust led congress to pass the sherman act of 1890. By 1890 several states have passed antitrust laws and now congress was joining the parade. The sherman act is important for us moving forward because it outlawed every contract and combination or conspiracy in restraint of trade again imposing a 5,000 fine. Potentially also a year in prison. I dont want you to be misled. This hardly represents the foundation of a robust Regulatory Regime. For one thing, the president of the gilded age were generally uncomfortable with this stored at state intervention. They held to a more traditional laissezfaire view. Benjamin Harrison Sign to the law because it was in accord with Public Opinion but he didnt do too much to enforce it. The same could be said for his successors whether a democrat like Grover Cleveland over republican like william mckinley. In moments when the federal government did try to enforce it, they were smacked down by the courts. In 1895 the course defanged the sherman act when it came to industrial combinations. The court declared 81 that the sherman act did not apply to manufacturing monopolies. The Company Controlled more than 90 of the sector. Certainly this is consolidation. They say production is not interstate commerce. That is something different. They have narrowly defined the powers given to enforcement under the sherman act. It would be until the 20th century that the sherman act was used successfully against industrial monopolies, something we will talk about in a later lecture. It wasnt only the government and Public Opinion also workers who were growing frustrated with the demands of gilded age businessmen. Like the public and the legislature, labor would be largely frustrated and its protests. The hard times of the agency of the meant less availability of work and less stability and at times harsh measures by management to try to keep their companies afloat. Railroads in particular had tried to respond to the crises of the 1870s by cutting their own rates in trying to outdo their competitors. How do they make up for the losses of these rates . They cut the workers wages. That led to a decade of mounting frustration by the workers. There were a series of strikes in 1876 and 1877. Resenting the wage cuts, and the public opprobrium it was often heaped on the workers as they stood up for themselves, it was seen that railroads were a good and so if you strike against the railroad you are doing something especially evil. The workers began to resent all of this. It exploded in the summer of 1877. A new group struck against the baltimore and Ohio Railroad beginning in july 18 77. Baltimore police broke up the first round of strikers. Then they took control of the key Railroad Junction in martinsburg west virginia. A battle between police and the mob required intervention by the militia. And eventually federal troops had to restore order. Within days these kinds of schemes were wrapping around the country. In baltimore a mob tried to trap the militia in an armory. The militia fired and killed 10 people. In pittsburgh rioters burned railroads and destroyed the depot. While exchanging fire with troops. Strikers in indianapolis seized control of the depot and halted all cars and trains except for ones carrying mail. By july 25th all the lines outside new england in the south are being affected one way or the other. You could feel the tension on streets around the country. In chicago businessmen patrolled the streets cheering a potential revolution. In buffalo the revolution was underway. Crowds swarmed the yard of the new york central. Ultimately this Great Railroad strike of 77 collapsed. First of all the depression was still going on and was easy to find desperate people to work as strikebreakers. Unemployment was still around 8 . Some companies were fearful of continued strikes and continued chaos and were willing to negotiate. Ultimately we cant call it a win for labor. If anything the press became increasingly indignant over this outburst of street action and they called on the states to beef up their militias to put down future agitation. Statelevel militia units were enhanced and armories were constructed to prepare for the next events. Meanwhile, conflagrations like those in the late 1870s caused many workers to ask a fundamental question. Wouldnt this be more easily accomplished if we had some Better Organization . Many of them turned to a fledgling organization the knights of labor. It started as a kind of secret society. He was obsessed with all sorts of rituals and secret posts. After 1877, many workers became interested in organization and they looked to the knights. This was often spontaneous. They were never particularly effective recruiters. People were looking for organization so by 1882 they had 14,000. They were taken over by new leadership. He moved to the group away from ritual and toward reform. They began stressing monetary reform as we discussed last time. They began discussing an eight hour day. Organizing for cooperatives among the workers. Trying to gain state and local political influence. Many within the knights of labor again embracing the ideas of henry george who called for a single tax on land. What is interesting is their broad membership. This group was anomalous especially within labor. They were highly inclusive. They reached across lines of craft, scale, it was skilled and unskilled workers. Immigrants and nativeborn workers. Catholics and protestants in this organization. Black members as well as white members. Female members as well asmen. A very large and Inclusive Organization and they were building a lot of momentum in the 1880s. They will have a precipitous decline however. A totally different ideal in labor will come to the fore. That is craft unionism. That is the American Federation of labor, founded in 1886. Their leader is samuel gompers. His papers are held in our library. They were not inclusive. They were focused on elite craftsman. This is strategic. The skilled craftsman have a little bit more leverage when it comes to negotiation. Unskilled craftsman are replaceable but skilled workers are a little more valuable. They had much narrower goals. The phrase the gompers spoke of was pure and simple unionism. We are going to get a better wage and shorter hours. Were not trying to change the world. This more conservative elite unionism. They could survive the chaos were going to talk about now. In the meantime, the 1880s would see recapitulations of many of the troubling themes of the 1870s. A Major Economic panic, this one in 1884. Followed by an industrial downturn and labor troubles. The great upheaval. A sporadic series of events. As successful strike by unorganized Railroad Workers against the Union Pacific railroad. The railroad capitulated within two days. Workers said now that we are on a roll lets join the knights of labor. Lets make this a permanent fixture. In june 1884 we saw the beginning of a major mine strike. 4000 workers went out on strike and it lasted six months. What noteworthy is that once again taught them the usefulness of coordination. If you go on strike you dont get paid. The strike doesnt last very long because you have to eat. They were able to organize a strike fund. It enabled them to keep this fight up for six months. The value of organization. Then came a major strike against the missouri pacific railroad. They were trying to have a pay cut. Most of that network was owned by our friends jay gould and others. The governors of nebraska and kansas intervened on behalf of the workers which tells us more about jay gould that it does about the governors. Jay gould gave back the pay cut. Once again workers saw value in the organization. This led to growth for the knights of labor. By 1886 they had 700,000 members. This would be their highwater mark. The first of several very famous the very telling episodes within American Labor relations. An explosion in the gilded age. That is the haymarket affair. There was a strike at the mccormick works on may 3, 1886. They were calling for an eight hour day. At least two workers were killed by police. There were anarchists in chicago. They said this violence to us is a wonderful example of our broader critique of american capitalism and we want to take advantage of this moment to use this tragedy in order to demonstrate to people the validity of our arguments. So they called for protests. Beginning may 4. Protests were well attended by the working classes especially german immigrants. There was a large turnout. It was peaceful by all accounts. The rhetoric was relatively tame. According to the relatively tame mayor of chicago, carter harrison, a lot of people were deciding that things were ok and it was time to go home. But it wasnt. What happened next at the rally, someone through a pipe bomb. A policeman was killed. The policeman began to fire. A shootout ensued. Six police and four protesters were killed in the crossfire. We never figured out who threw the pipe bomb. We knew who to blame. The anarchists. These germans, these radicals. Four of them were executed. Others received long prison sentences. One committed suicide. In the 1890s John Peter Altgeld the new governor of illinois and himself german born pardoned three surviving anarchists. Basically saying the whole thing has been a travesty of justice. We still dont know who threw the pipe bomb. We know it wasnt them. The resulting fear of radicalism led to increasing antilabor sentiment nationwide. 1892 was a. We couldve picked any number with many major incidents. In new orleans there was a general strike that went on and on. 25,000 workers. Dozens of different organizations. Lack workers and white workers in new orleans. A major incidents in the coal mining fields of eastern illinois. The coal creek wars. Tennessee miners protested against the use of convict labor is being used to undermine their wages. They protested by arming themselves and burning down the stockade where the convicts were being held. Releasing a lot of the prisoners. The militia came in. Homestead pennsylvania. And Andrew Carnegies steelworks. They are trying to organize and to join a National Group known as the amalgamated iron and steel workers. At one point in his career Andrew Carnegie had favored the principle of collective bargaining but it was hitting a little too close to home now. And so he changed his mind. He did not become a Great Innovator and billionaire but by being a fool. He prudently decided this battle was not for him. He left it to henry clay frick. He declared